BiggerPockets

Banks verses the Mortgage Broker

Tuesday, October 05

Well I saw it coming with the S.A.FE ACT written to eliminate a large group of mortgage brokers. Now Bank of America, one of the 3rd largest wholesale lending banks, is going retail ONLY, yes. Heard it on Street Signs this morning. The next thing I see coming further into the future is B of A  internal processing   system collapse.

They will not be able to replace brokers with salary loan officers. If you think it takes a long time to get a loan processed now, just wait and see.

The secondary market couldn't underwrite private sector loans stolen in greed.

The banks without brokers will cave also.

Wait and see.  Anyone want to start a "Peoples" Bank. I'll handle the hard money and someone who can think and make sensible decisions can do the other loans.:)

Fed's just upped the FHA Fico  score minimum. Fico usually false- robot decision maker.

   Hang in There 

How to Qualify for a Hard Money Loan.

Monday, October 04

So, how do you qualify for a hard money loan?Truth be told, you don't. The property is or should be 99% of the underwriting criteria. Investors lend on property that has plenty of a protective equity left after funding the loan.

Asking for 100% financing is something to ask your uncle. Investors look a profit and risk, the same as a buyer does.You offer 12% 2 pts so you can buy and flip a property in say 60 days and make 25% 30%..profit.That leaves the lending investor a whopping 2%, and he put up all the money and takes all the risk. That is why that concept doesn't work. Also future value after rehab would be taking the risk that the work may not be done. So As-is value is looked at much closer. 

Investors like to be 55-60% of value. If you can't come in with all the cash balance needed there are other ways.

If you own another  property with equity that could  be borrowed in conjuntion with purchase, a blanket loan, also a seller carry back. However, the investor has to feel comfortable you have enough "skin in the game" so if the going gets tough you don't walk away and leave him the problems.

Colleen Bigler

Loan Solution Inc.

661-251-9075 

Hard Money Lenders -Can you opt out of the S.A.F.E. Act?

Sunday, September 26

I would like to discuss Hard Money Lenders and the new required federal license. No sense, written for bankers not consumers, would be just one protest. We don't and haven't for some time made consumer loans to owner occupied properties. I am sorry they have no where to go now, with damaged credit or if self-employed and use an accountant. Blame that on the bankers who stole hard money loans from the private sector. That turned out to be a terrific idea.Then pass down regulations that are written for blind investment pools, not hand on investor. 

Like Fico scores, I am waiting for that class action law- suit, due to the damage that inadequate scoring is doing.  They also forgot to add the Collateral into the equation. Being a previous banker, I see they forgot the 5 C''s of credit. 5-1 Collateral, 5-2 Capacity to pay,5 -3 Character (hind-sight) 5-4 Capital little to no down, now that leaves  1 credit.  Score? Good today, unemployed and gone tomorrow. That doesn't leave much to bank on.

From my research on that "safe act" ha, you are dealing with "Consumer Loans" However, Truth- in -Lending has exemptions -if purpose is business, non-consumer loans. Also, Truth in Lending is written for Owner Occupied 1-4 check it out.

So commercial,land-not for building primary residence, and investment purchases and loans on investment property you don't have to have the license. 

Brokers that had problems with their credit the past few years..yes lots  of you, can still make loans in the private hard money sector so far as I see if you can't get the license. Commercial loans, land  loans, investment property with non-consumer purpose. So, call me with your referrals.

Any comment?